Congratulations! You’re almost through the entire home buying process. But there’s one final step before closing is official: paying closing costs.
Closing costs are taxes and fees associated with the sale of a home, such as title insurance and loan fees. To help you prepare for the final steps of the home buying process, this Redfin article will detail closing costs in Florida, who pays them, and what you can expect to pay as a buyer and seller.
What are the closing costs in Florida?
In addition to a down payment, homebuyers also need to pay closing costs to get the keys to their new home. As a general rule of thumb, you can expect Florida closing costs to be 2%-5% of the purchase price. But it’s important to remember that this is just a range and the total amount will depend on many factors, such as the buyer’s loan program or negotiations with the seller.
Let’s say you’re buying a home in Jacksonville, where the median sales price is $315,000. Based on this, you can expect closing costs to be between $6,300 and $15,750. However, if you buy a home in Palm Beach, where the average sales price is $2,450,000, closing costs could range from $49,000 to $122,500.
Who Pays Florida Closing Costs?
In most areas, including Florida, both the buyer and seller will pay closing costs. However, the amount of closing costs for each party will vary based on how much they need to pay. Keep in mind that it’s common for the buyer to pay closing costs out of pocket, while the seller’s closing costs are usually deducted from the home sale proceeds.
Florida buyer closing costs
For Florida home buyers, you can expect to pay 2%-5% of the purchase price. If you pay a deposit, this amount will be deducted from your closing costs, which will reduce the total amount you owe at closing. The deposit is usually 1%-3% of the house price. Here are some common closing costs buyers pay:
- Assessment fee: Home appraisals typically range from $300 to $500 and are usually paid separately at the time of service. However, if not, you will need to pay a fee at closing.
- Inspection fees: Although not required, a home inspection is highly recommended. The cost of a home inspection generally ranges from $300 to $500 and is usually paid at the time of service. However, if not, payment will be required at closing.
- Loan origination fee: Some lenders charge a fee to create the loan. When you’re shopping around for a lender, ask about what they cover and whether you can negotiate to avoid high fees.
- Loan processing fee: Lenders may also charge a fee for loan processing, including underwriting and related services. Similar to the origination fee, check with your lender to understand its purpose and possible exemptions.
- Loan discount points: If you buy points to get a lower interest rate, you’ll usually pay a one-time fee at closing. Each point can lower your rates by 0.25% to 0.5%. Before purchasing points, consider your long-term plans, such as how long you plan to own the home or whether you plan to refinance.
- Private Mortgage Insurance (PMI): If the down payment is less than 20%, PMI may charge an upfront fee at closing, depending on the loan type. It is usually part of your monthly payment, but some loans offer the option of paying it as a one-time fee.
- Title Insurance: Title insurance is a one-time fee paid as part of the closing costs. Buyers often carry both lender and owner title insurance.
- Home Insurance: In Florida, your annual homeowners insurance premium may be part of your closing costs.
- Homeowners Association Dues: For homes in HOA-managed communities, you may be required to pay one month’s dues upon closing, which may vary by property and cover maintenance and operating expenses.
- property tax: Buyers may have to pay property taxes upfront as part of Florida closing costs.
Florida Seller Closing Costs
Seller closing costs in Florida vary with each transaction, but here are some common closing costs sellers pay:
- Real estate agent commission fees: These fees can be a significant cost for sellers. Commission fees may vary and are subject to negotiation. Sellers should discuss their options with an agent.
- Homeowners Association Fees: If the property is part of a homeowners association, the seller is generally responsible for settling any unpaid HOA fees or assessments as of the closing date. Additionally, the seller may be required to provide certain HOA documents to the buyer as part of the sale.
- property tax: Any outstanding property taxes will be due at this time. However, if the seller prepaid property taxes after the closing date, they may receive a refund for the portion that was paid but will not be used.
- Title Insurance: As part of a Florida seller’s closing costs, the seller may pay for owner’s title insurance. Typically, this cost is based on the sales price of the property.
- Transfer tax: In Florida, the seller is responsible for state taxes and possible local transfer taxes. These taxes are usually a percentage of the property’s sales price and vary widely by jurisdiction.
Median home sales price data from the Redfin Data Center for July 2024.
